NBC bond starts trading at DSE after successful sale

The NBC Twiga bond was concluded on December 7 after a subscription of 130 percent during the one month primary trading.

The bank is targeting to raise Sh300 billion in the next five years to boost its financing of businesses and other economic activities.

In the first tranche of the bond which was launched on November 7, 2022, the bank targeted to raise Sh30 billion, although it managed to mobilise Sh38.9 billion.

The net proceeds will lend to retail, small and medium-sized businesses, agricultural value chain businesses whose products and services directly impact women and youth, and local and multinational corporations, the bank said.

Gracing the listing event at the DSE offices, the commissioner responsible for sovereign debt management at the Ministry of Finance and Planning, Mr Japhet Justine, who represented the Permanent Secretary Ministry for Finance and Planning, applauded NBC for the move as it will open up the stock market and empower the business community.

“The government applauds the innovation of bringing Twiga Bond to the market to raise funds to support the SME and the agricultural value chain. Apart from supporting the financial inclusion drive, we are happy to learn that the trickle-down effects will reach further down the supply chain by financing the SMEs, MSMEs, and the agriculture value chain at large. Let me assure you of maximum government support,” he said.

On his part, NBC managing director Theobald Sabi, who was represented by the bank’s director of treasury, Mr Peter Nalitolera, said; “The oversubscription shows the trust that the market has in the NBC brand, and we are equally grateful for their trust and support,” he said.

He explained that listing Twiga Bond on the stock market will open more doors for further trading of the bonds.

“Now investors who bought the bonds during the primary market can easily trade, while those who did not manage prior can now buy via the stock market brokers,” he added.

Investors in the NBC Twiga Bond would earn an interest rate of 10 percent per annum, payable quarterly throughout the five years investment tenure.

Giving her remarks during the occasion, the DSE chief executive officer, Ms Mary Mniwasa congratulated NBC for the important step while noting that the bank’s participation in the market makes DSE close this year with the listing of two corporate bonds.

“The two bonds listed within this year make the number of corporate bonds that have been listed on DSE reach five with a total value of Sh186.67 billion. The figure may seem small, but it reflects the great efforts that are being made,’’ she said.

Capital Markets and Securities Authority (CMSA) chief executive officer, Mr Nicodemus Mkama, congratulated the government for creating an enabling environment that attracted more investors to the bond.

“The achievement has largely been backed by the enabling environment of the government, especially its move to remove the withholding tax on corporate bonds, a move that has attracted more investors to the kind of bond,” he said.